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Proposed rent control could distort Seattle’s rental market

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(The Center Square) – With a new rent control proposal to be voted on by the Seattle City Council in August, experts say that capping rent increases is not an effective way to increase affordable housing.

Seattle City Councilmember Kshama Sawant is proposing an ordinance that would prevent monthly rent from increasing by more than the rate of inflation. However, the legislation would not be permitted in the city due to the State of Washington prohibiting any local municipality from regulating the amount of rent that a landlord can charge.

If the state-level prohibition is repealed, the ordinance would go into effect between the time of the repeal and 18 months after, according to the council bill.

Rental Housing Association of Washington Executive Director Sean Flynn told The Center Square that democrats in the Washington State Legislature attempt to overturn the prohibition on rent control on an annual basis. Last year, six bills were proposed with the legislature voting against every one.

Sawant has proposed similar rent control bills in the past. She said her latest proposal, Council Bill 120606, is similar to a bill her office proposed three years ago.

Flynn said the state legislature will not budge on changing its block on local rent regulations because it distorts the rental market and creates housing instability.

“No developer wants to build in a rent controlled market . . . why would you spend your own money to develop a rental property you can’t even make money on,” Flynn said to The Center Square in a phone call.

Sawant’s proposal would cap rent at the rate of inflation, but Flynn said costs for landlords are higher than the rate of inflation.

A central staff memo on Council Bill 120606 cites data from the American Community Survey that revealed that the median Seattle rent increased by 15% between 2017 to 2021 from $1,555 to $1,787. The median Seattle rent increased by 80% between 2010 and 2021, with 2010 rents at $990.

Data from ApartmentList.com shows that the overall cost for rent in the City of Seattle was an average of $1,543 in January 2017. The average overall cost for rent in June 2023 was $1,741.

Seattle saw its lowest average rent in January 2021 at $1,354. Its highest: $1,854 in August 2022, reflecting an annual cycle in which rent goes up in the summer and goes down in the winter season.

Flynn said if rent regulations were put in place in Seattle, landlords would not put money into their buildings, causing the quality of rental stock to drop. Supply can be directly affected as well due to landlords leaving the market and a lack of new money coming into the city to build new housing units.

“This has been the story of rent control again, and again, and again,” Flynn said. “And so what happens is: supply goes down, and when supply goes down, price goes up.”

Council Bill 120606 was voted down by the Sustainability and Renters Right Committee by a vote of 2-3. However, the committee vote is only a recommendation to the full city council. The legislation will go to the full Seattle City Council for a final vote on Aug. 1.

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